Our organization has remained relatively spyware free - the only workstations that become infected are among those that are taken offsite. In the office, we have a Watchguard Soho firewall and run ISA Server. We also ask users to use Firefox unless absolutely necessary (like Windows/Office updates).
At home, where I don't have the luxury of the hardware firewall, I use Trend Micro's Internet Security and also browse with Firefox.

The best way to avoid ad and spyware (aka malware) is to use an operating system that doesn't routinely allow users to overwrite system files (i.e. to install software). For many MS Windows users this is the norm (i.e. the normal user has Administrator privileges) - also given its many well known security holes, Windows is a frequent target for malware.

Systems that make this difficult, and are consequently far less vulnerable to malware, are Linux and Mac OS X. If you want to avoid having to fret about malware and want to see how fast your modern hardware can run without the burden of anti-virus software, switch to one of them. If you're stuck with MS Windows, at least switch to Mozilla Firefox - it's free of cost, open source, and quick to set up. Plus, it runs on Linux and Mac OS X, too, so you can keep your favourite web browser when you're finally in a position to leave MS Windows behind.

Interesting to see almost an average of one year between posts on this thread - it might suggest adware and spyware are not the issues they once were (something perhaps supported by modern computing practice).

Despite abandoning the use of such mainstays as Spybot S&D and Adaware etc., I haven't had a single issue with adware or spyware on any of the computers I use and/or administer for the better part of two years - certainly since upgrading to Windows XP SP2 and IE7. Add to this the common practice nowadays of users (of all operating systems) not connecting to the 'net under administrative accounts, and adware / spyware should be a non issue for msot computer users - as the lack of posts to this thread seems to suggest.

I would agree. I've had almost no problems with adware or spyware for the past three years or so. One thing I'd point out in relation to dlane's post is that those of us who run networks with Windows domains don't have the problem of standard users with admin privileges (unless we're very lax with the way we configure our user accounts).

Yep, I can't recall the last time we've had an adware/spyware installation situation.

I run IE on my network which many believe is an inevitable invitation to ad/spyware. But I personally find it easy to keep 50 computers with IE patched via a centrally managed WSUS server. I also do not grant users local admin rights of their machines ('cept in special situations)

So, the combination of regularly patched machines and the inability of users to install things on accident has worked for us. I don't think I'd spend any of my budget on ad or spyware prevention until the landscape changes again.